That's All Folks1 Oct 2025 15:56
Reasons for delayed or non-clearing payments
Several recent issues within the Prax Group are the likely cause of non-clearing payments:
Insolvency of Prax entities: In mid-2025, several companies associated with the Prax Group failed and entered administration, including the parent company State Oil Limited and the entity that ran the Lindsey oil refinery.
Liquidity crisis: Administrators reported that the collapsed Prax entities faced "escalating liquidity pressures" before their failure. A receivables facility was canceled due to "material irregularities," and a "significant sum" was owed to tax authorities.
Sale of assets: To address its financial troubles, Prax was forced to sell off assets. In September 2025, Serica Energy acquired Prax's North Sea upstream assets, which originated from the Hurricane Energy acquisition. While this sale may resolve some debt, it complicates the original DCU payment structure, as the assets are no longer under Prax's ownership.
Impact on DCU holders
The current financial situation means that future payments to DCU holders are at risk, or may never clear.
DCU obligations tied to Prax: The obligation to pay former Hurricane Energy shareholders remains with Prax Exploration & Production, the entity that bought the Hurricane assets.
Risk of non-payment: Since the ultimate parent company is in administration and the underlying assets have been sold off, there is significant doubt that Prax can, or will, honor its DCU obligations.
Administration of State Oil: The insolvency of the parent company, State Oil Ltd, has added a layer of complexity. As one shareholder noted on London South East, there has been "no public notification of any restrictions on that within Prax resulting from the administration of State Oil Ltd".
What happens next
DCU holders are now essentially unsecured creditors of a financially distressed company. The outcome for these payments depends on the resolution of Prax's insolvency, a process that can be lengthy and complex. In such a situation, secured creditors are paid first from any remaining assets before any funds can be distributed to unsecured creditors like DCU holders.
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